Allatoona Landing reported net credit sales of $1,250,000 and cost of goods sold of $900,000 during the current year. Its beginning balance of Accounts Receivable was $175,000. The accounts receivable balance decreased by $25,000 during the year. Rounded to two decimal places, what is the company's accounts receivable turnover rate for the current year?

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The accounts receivable turnover rate is calculated by dividing net credit sales by the average accounts receivable. The ending balance of Accounts Receivable is the beginning balance ($175,000) minus the decrease ($25,000), which equals $150,000. The average accounts receivable is ($175,000 + $150,000) / 2 = $162,500. The turnover rate is $1,250,000 / $162,500 = 7.69.

Allatoona Landing Reported Net Credit Sales of $1,250,000 and Cost